Blanchard presents a unified and global view of macroeconomics, enabling students to see the connections between the short-run, medium-run, and long-run.

Both rigorous and comprehensive, the Fifth Canadian edition of Blanchard and Johnson’s Macroeconomics has the unique ability to clearly convey the “life” of macroeconomics while presenting the discipline as a coherent whole. This new edition continues to provide an integrated view of macroeconomics allowing students to make sense of macroeconomic events.

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Chapter 1 A Tour of the World

1) A high rate of growth of productivity is:
A) associated with a large government budget deficit.
B) measured by looking at the growth in output per worker.
C) associated with a decrease in the standard of living of a country.
D) associated with a decrease in the unemployment rate.
E) measured by looking at the growth in inputs.
Answer: B
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 1-1

7) Which of the following countries by 2002 were included in the same common currency area?
A) Mexico and the United States
B) Spain and France
C) Japan and China
D) United Kingdom and France
E) Canada and France
Answer: B
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 1-4

8) At what point could the Euro be used as currency?
A) January 1, 2000
B) January 1, 1998
C) January 1, 1999
D) January 1, 2002
E) January 1, 2004
Answer: D
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 1-4

9) Which of the following conditions has NOT occurred in Japan in the past decade?
A) a reduction in stock prices
B) a reduction in the rate of growth of output
C) deflation
D) economic boom
E) recession
Answer: D
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 1-6

11) The usual unemployment rate in Canada:
A) has risen in the last 40 years.
B) is usually around 20%.
C) is usually around 10%.
D) rises in an expansion and falls in a recession.
E) has fallen in the last 40 years.
Answer: A
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 1-2

12) The unemployment rate in Canada:
A) is usually lower than the unemployment rate in the United States.
B) is usually higher than the unemployment rate in Europe.
C) is higher in a recession.
D) is lower in a recession.
E) is higher in an expansion.
Answer: C
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 1-2

14) In the United States, Canada and Europe in the 2000s, relative to the 1980s-1990s:
A) all countries had relatively low inflation.
B) all countries had relatively high inflation.
C) all countries had relatively rapid output growth.
D) all countries had large government budget deficits.
E) all countries had relatively low unemployment rates.
Answer: A
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 1-3

16) A comparison of the annual average inflation rate for the periods 1980-1999 and the period from 2000-2007 in Canada shows:
A) the recent increase is due to large open market operations.
B) the inflation rates have decreased.
C) the inflation rates are basically the same.
D) the inflation rate increased from 2000-2007.
E) the inflation rate fell from 1980-1999.
Answer: B
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 1-2

17) In the United States, the average price of a house fell by 20%. The behaviour of house prices is relevant because:
A) as houses fell in value, there are more reasons to build more new houses.
B) if the value of a house falls below the outstanding loan, the borrower wants to repay the mortgage quickly.
C) Americans felt poorer and reduced consumption.
D) if the value of a house falls below the outstanding loan, banks can make more profits.
E) if the value of a house falls below the outstanding loan, bonds held by investment banks increase in value.
Answer: C
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 1-3

18) The housing crisis in the United States is called the “sub-prime” mortgage meltdown. “Sub-prime” borrowers are:
A) borrowers with relatively low incomes and risky jobs.
B) borrowers with relatively high incomes and risky jobs.
C) borrowers with relatively low incomes and non-risky jobs.
D) borrowers with relatively high incomes and non-risky jobs.
E) borrowers with average incomes and risky jobs.
Answer: A
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 1-3